Re: Mass treatment of Roth Conversion

From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Mass treatment of Roth Conversion
Date: Mon, 22 Jun 1998 19:48:55 -0400

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><I don't know how you can say that about a state that has a 12% tax on
>unearned income.>  
>
>My understanding is in Mass an IRA distributions is considered 5.95%
>income not 12% income.

True.  However, that was in the context of talking about how
unfair the MA tax rate on dividends and interest is.  I had 
also mentioned how I had read in more than one article that
earnings inside of *Roth* IRAs will be taxed at 12% regardless
of whether they are long-term cap gains or not.  I admit such
a statement puzzles me but I have seen it in more than one place.
Of course (hopefully :-) it'll be moot quite soon, since the
tax cut packages passed by the MA House and MA Senate (a
conference committee is currently thrashing out a reconciled 
bill) both will follow the federal treatment of Roths.

>distribution reduces Cost Basis first, and the Cost Basis includes all
>IRA contributions, whether deductiable or not on Federal Return.  Mass

Here I disagree slightly.  I believe that the MA cost basis in a
traditional IRA only includes contributions made while one is an MA
taxpayer (deductible or not), not all contributions.  At least this is
what I remember the Form 1, Sched X instructions saying.

Rich Carreiro
rlcarr@animato.pn.com
P5-100/RedHat Linux 4.1



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